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A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

The White House used Twitter to warn Russia that “the missiles are coming” in Syria, helping answer the age old question, “What would it look like if Biff Tannen from Back to the Future were running the world’s most powerful country?”

Equity futures immediately dropped and oil prices surged on the news.

“Trump Tells Russia to ‘Get Ready’ for Missiles Coming at Syria” – Bloomberg


Closer to home, RBC warned that the condition of domestic household balance sheets is deteriorating.

That was likely inevitable given the record indebtedness of Canadian consumers – for debt levels there was nowhere to go but down and deleveraging had to happen at some point – but the (hopefully slow) process of reducing debt will still have negative economic consequences,

“The roll rate -- the percentage of credit card users who “roll” from early stage delinquencies to 60-89 day delinquencies -- reached the highest since 2008 for one credit card program, while delinquencies for another program were above the 10-year average, [RBC analyst Vivek] Selot said in a monthly analysis of credit securitization programs. “Cracks are starting to show in more and more places,” Selot said Monday in a note to clients. He declined to comment further.”

“Cracks ‘Starting to Show’ in Canadian Credit Quality, RBC Says” – Bloomberg

“Optimism in the Canadian economy hits 2-year low: CPA” – BNN


Despite consumer debt levels, Merrill Lynch analysts expect three more Bank of Canada interest rates before the end of 2018,

“CAD has been supported in part by the chance of a deal within reach at NAFTA negotiations. If a deal happens, as we expect, it has two implications for monetary policy. On the one hand it will.. provide room for CAD to rally which delays hikes. On the other hand, it removes the most important source of uncertainty for the Canadian economy, which clears the way for the Bank of Canada to hike more in synch with the Fed.”

“@SBarlow_ROB ML: BoC hikes are coming” – (research excerpt) Twitter


Bloomberg provided a summary of opinions from their recent New Energy Finance Future of Energy Summit,

“Mining mogul Bob Murray offered a passionate defense of coal, asserting that we’d all “die in the dark” without it … Oil demand will remain strong to around 2040 and plateau rather than peak, [BP CFO Brian] Gilvary said. “We will continue to pursue world projects. But we will do that in a way to make sure we start to reduce emissions in our own business.” … Nuclear power may be on the ropes, as reactors struggle to compete with gas plants. But the technology will rise again with smaller, cheaper and more agile reactors, said Edward McGinnis, principal deputy assistant secretary for the U.S. Energy Department’s Office of Nuclear Energy.”

“Coal Dead? Peak Oil Demand? Five Takes on Fossil Fuels’ Future” – Bloomberg


The Financial Times’ (free with registration) Alphaville site argues “Amazon is not a bubble” despite its lofty stock valuations,

“Optically, there is little doubt Amazon is richly priced. Today it trades at four times last years sales and 170 times next-years projected earnings. If you were to liquidate Amazon tomorrow, the book value would only cover 4 per cent of the $680 billion market capitalisation… Fast-forward five years, and analyst’s crystal balls are radiating with even more mind-boggling numbers. By 2023, Amazon is expected to generate $535bn in revenue, or 12 percent of 2017’s total US retail sales, according to Bloomberg”

“Amazon is not a bubble” – FT Alphaville


Tweet of the day:

Diversion: “Your Body is a Teeming Battleground: It’s time to rethink the quest to control aging, death, and disease—and the fear of mortality that fuels it.” – The Atlantic

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